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In response, I offer the chart below. If inflation were coming, the long-term bond would reflect it with a bearish chart (bond yields correlate inversely with price). Does the chart look bearish? Not hardly. Even to someone who knows nothing about charts, T-bond futures look like they are headed to the moon.

I've been predicting for years that interest rates on 30-year U.S. Bonds, currently around 2.70%, are headed to 1.64% or lower. If so, the futures contract shown in the chart is headed most immediately to 186^15. If so, anyone betting on inflation, as Mr. Brown has suggested, is going to get killed.

Betting on deflation, on other hand, offers some of the juiciest odds that can be found in the investment world. If interest rates fall below 2% as I've been predicting, the capital gains potential of T-Bonds is enormous - on the order of 20% or more per year if the interest-rate drop occurs over the next 18-24 months.

Here's another headline from Wednesday's Journal: 'Fed Signals No Rush to Raise Rates'. Now there's an understatement. The Journal embarrasses itself when it implies that a rate hike is still possible. When the Fed tried to pretend it could walk the walk a couple of months ago, raising administered rates by a token 25 basis points, it set off a panic in global markets that could conceivably have snowballed into a crash like the one in 2007-08. We're that close. Under the circumstances, talk of a rate hike is about the stupidest thing I've ever heard.

Author's note: Click herefor a free trial subscription that includes Rick's daily forecasts and updates in real time, plus access to a 24/7 chat room that draws veteran traders from around the world.

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